1. PricewaterhouseCoopers 1 Route2000 - Rolighed Real time routing Challenges and experiences from real life large scale implementations Ole Kessel, Partner and DPS manager PricewaterhouseCoopers

2. PricewaterhouseCoopers 2 Introduction to DPS CoE There is real value in real time routing ! The challenge in the transportation market Our vision and messages to customers The DPS service offerings Our market position and references Short presentation of real life solutions

3. PricewaterhouseCoopers 3 There is real value in real time routing Aalborg Portland (100 truck cement distribution): - 7% in operating costs, - 75% in administrative staff KFK (700 truck fodder & grain transporter): - +10% improved truck work load Swedish Postal Services: - 10% reduction in routing costs MD-Foods (400 truck dairy & fresh food distributor): - 4% in total route costs SPF (100 truck living pig transporter) - 7% in operating costs

4. PricewaterhouseCoopers 4 The challenge in the transportation market: 1 JIT & e-business imply: –Shorter business cycle –Faster and more in-frequent deliveries –Smaller order sizes –Focus on precision and flexibility

5. PricewaterhouseCoopers 5 The challenge in the transportation market: 2 Transportation is an important but often overseen part of the Integrated Supply Chain (ISC): –Transportation is the crucial physical link - between suppliers, manufacturers & buyers - internally in multi-site manufacturing –The weakest link decides the value of the ISC Substitution between transportation, warehousing and manufacturing costs should be considered Using transportation more offensive creates competitive advantages

6. PricewaterhouseCoopers 6 The challenge in the transportation market: 3 The transporters must act to survive –Agility through dynamic decisions –High customer service a necessity –But keeping low costs is a pre-requisite First movers will get the competitive advantage

7. PricewaterhouseCoopers 7 Our vision and messages to customers Agility, speed and precision in transportation scheduling –Avoid unnecessary locking in the planning –Booking on longer term, locking just before doing –Dynamic decisions are superior to pre-planning –Event-driven optimisation Combine IT & human intuition –Making it easy to get info and overviews –Overruling automatic decisions Focus on using transportation as an offensive differentiator

8. PricewaterhouseCoopers 8 The DPS service offerings: 1 Routing and simulation packages Postal transportation ERP-like solutions Dynamic transportation optimisation systems Fleet management and scheduling systems

9. PricewaterhouseCoopers 9 The DPS service offerings: Creating customised component-based solutions : –Basic components GIS, Geo-coding, distance- & time calculations GPS, Real time positioning, self-reacting control, Proof of Delivery, parameter-estimationGPS, Real time positioning, self-reacting control, Proof of Delivery, parameter-estimation –Business intelligence components Real-time event-driven optimisation engine Route optimisation algorithms –Interfacing components Mobile communication Internet connection Gantt-charts as active desk-top

10. PricewaterhouseCoopers 10 GIS, Geo-coding, distance- & time calculation

11. PricewaterhouseCoopers 11 GPS, Real time positioning

12. PricewaterhouseCoopers 12 Mobile communication GPSGSM On Board Computer Orders Truck Status Positions Orderno.….. Item…. From…To. SAP Communication Server Central DB Client Plan- ning Server Client

13. PricewaterhouseCoopers 13 Internet connection

14. PricewaterhouseCoopers 14 Real time event-driven optimisation engine Hansen A/S Olsen A/S Larsen A/S GHE

15. PricewaterhouseCoopers 15 GANTT charts

16. PricewaterhouseCoopers 16 Route optimisation engine Event-driven optimisation engine –Events that drive optimisation: - New orders - New truck status - Time goes Real time status known, locked resources and orders Permutations on most likely and acceptable changes –Qualification control engine Calculating consequences of changes –Time and cost consequences –Penalty calculation engine is the criteria-function

17. PricewaterhouseCoopers 17 Our market position and references By geography –Denmark - Scandinavia - Europe By industry –Energy, Services, Postal, CIP/CPG By service –Goods distribution, collection, mixed –Field Services

18. PricewaterhouseCoopers 18 Who is DPS ? DPS in short facts & figures –Started in 1975 as Peter Matthiesen A/S –Merged with Price Waterhouse 1997, now PwC –45 consultants based in MCS Copenhagen –25 years of experience in logistics –Focusing solely on transportation optimisation

19. PricewaterhouseCoopers 19 Short presentation of real life results:1 Case Aalborg Portland (100 truck, cement distribution of 1,5 million tons per year) –7% reduction in operation costs –No order entry deadlines and centralised planning –Reduction in office staff from 19 to 5 –Automatic order booking and re-scheduling –Integration to ERP system

20. PricewaterhouseCoopers 20 Short presentation of real life results:2 Case KFK (700 truck, fodder and grain distribution of 3,5 mill. ton per year) –+10% improved truck workload –Improved utilisation of stocks and fodder-factories –Higher delivery precision and flexibility –Calm and non-stressed paper-free planning office –Automated payment for hired trucks –OnBoardComputing in all own + 50 hired trucks

21. PricewaterhouseCoopers 21 Short presentation of real life results:3 Case Swedish Postal Service Used in: –Operational planning of business parcels –Collecting from mail boxes –Planning inbound and outbound –Rural mail –Express mail Savings (example rural mail delivery) –10% reduction in routing costs –Improved vehicle utilisation –Workload balancing

22. PricewaterhouseCoopers 22 Short presentation of real life results:4 Case SPF (100 truck distribution of 3 mill. living pigs per year) –7% reduction in transportation costs –Improved vehicle utilisation –Improved planning according to health status –Capability to act qualified on changes in the plan –Disease contamination control

23. PricewaterhouseCoopers 23 So there is really value in real time routing! Pay back typically in less than one year Together with many other improvements: –Improved customer service and reliability –Improved agility and flexibility –Improved administrative routines And it is done in practice !